ATLANTIC SUPERCONNECTION BEGAN DEVELOPING THE SUPERCONNECTION IN 2012 AND STARTED WORK ON PLANS FOR THE FACTORY IN 2016. SINCE THEN, ATLANTIC SUPERCONNECTION HAS PROVEN THAT THE SUPERCONNECTION IS TECHNICALLY FEASIBLE BEING ONE OF THE MOST ADVANCED SUBMARINE CABLE DEVELOPMENT PROJECTS IN THE WORLD AND IS READILY FINANCABLE

Ready to launch and complementary to the UK’s industrial, energy and climate change objectives, Atlantic SuperConnection will help the UK meet its growing demand for electricity, deliver security of supply, and generate over 500 jobs and wealth creation for the North East, while providing the UK with a global leadership opportunity in a quickly evolving industry.

“Through a unique renewable energy partnership with Iceland, we can bring a near-limitless source of clean hydroelectric and geothermal power to the UK – all while delivering jobs, growth and investment opportunities to Britain’s world-beating industrial heartland.”

Fiona Reilly, Executive Partner, Atlantic SuperConnection

THE SUPERCONNECTION:• Delivering a c.1500km subsea High Voltage Direct Current (HVDC) cable from Iceland to the UK, providing between 700MW and 1.4GW of reliable, on-demand and baseload energy through clean hydroelectric and geothermal generation;• Bringing sustainable, low carbon power to approximately 1.5 million British homes, balancing intermittent power such as wind, all at a highly competitive strike price of around £65/MWh; while• Providing Iceland with increased grid security and significant economic benefits

THE FACTORY:• Building a new purpose-built factory and HVDC test facility bringing advanced HVDC sub-sea manufacturing capability to the North East of England;• Fostering world-leading technical and manufacturing capabilities to the UK; and• Creating around 500 local jobs, a GVA of around £200 million per annum, and growth and investment for the whole region

Production of HVDC cabling will enable the UK to develop and deliver future energy projects at home and abroad more competitively.

Atlantic SuperConnection’s commitment to R&D will enable the UK to develop a valuable HVDC manufacturing skills base that can be exported to global markets.

SECURE, CLEAN, AFFORDABLE ENERGY

The SuperConnection project is ready both financially and technologically – providing secure, affordable low carbon energy to the UK at a highly-competitive strike price of around £65/MWh. It harnesses Iceland’s abundant clean energy resources to deliver sustainable on-demand electricity to the UK.

In 2008, the Climate Change Act introduced a legally binding target to reduce the UK’s greenhouse gas emissions to at least 80% below 1990 levels by 2050. To meet these commitments, the UK will have to decarbonise the lion’s share of its electricity by 2030, and as part of this commitment it has agreed to close all coal plant by 2025.

Energy demand in the UK is forecast to grow by 1.4% per annum to 2030. Even the most conservative projections show a 4% increase from 2016 figures by 2035. In addition, with the UK’s coal and legacy nuclear power plants set to retire by the mid-2020s, significant investment in new low carbon generating capacity is urgently needed. The SuperConnection is able to help: meet the energy needs of the UK, meet carbon targets and provide on-demand power to balance intermittent technologies.

dotted-mapCreated with Sketch.

A RENEWABLE ENERGY PARTNERSHIP WITH ICELAND

Iceland is ideally placed to provide the UK with a proven, cost competitive and reliable on-demand and baseload supply from hydroelectric and geothermal energy.

Iceland currently generates 100% of its electricity from these low carbon energy resources for domestic and industrial use, and is estimated to only be producing about one-third of its total potential energy generation capacity.

The unique attributes of a connection with Iceland – the capability of bringing very low carbon, reliable baseload and peaking electricity to UK consumers at a price below other low carbon sources – strongly supports the development of the SuperConnection. ASC believes that there is no other project currently under consideration that can deliver all of these benefits.

A GROWING COALITION OF SUPPORT

Through the recent changing political landscape in Iceland, Atlantic SuperConnection has maintained and built strong relationships with Icelandic Ministers. Cross-party support for The SuperConnection in Iceland is growing.

Following the initial development of The SuperConnection, the Icelandic Government and the UK Government entered into a Memorandum of Understanding “…to explore the possibility of developing an electricity interconnection between Iceland and the UK…” in 2012.

Between 2012 and 2015, ASC continued developing The SuperConnection. On 28 October 2015 the then UK Prime Minister, David Cameron, met with the then Icelandic Prime Minister Sigmunder Davio Gunnlaugsson and they agreed to explore further The SuperConnection.

Heads of terms were signed to establish the Iceland Energy Task Force for Iceland and the UK to consider The SuperConnection. The Task Force issued its Joint Statement in July 2016, which was supportive of The SuperConnection. The Task Force was reconstituted in 2017 and discussions are continuing between the UK and Icelandic Government.

MAPPING A PATHWAY TO SUCCESS

In the UK, Atlantic SuperConnection is looking to secure long term political support for The SuperConnection and The Factory. This could come via routes such as a Contract for Difference (CfD), the Cap and Floor mechanism or some other form of support such as a RAB (Regulated Asset Base) model.

A signal of UK Government support is crucial for The SuperConnection to progress and to ensure that it can be brought online by the mid-2020s. Construction is planned for 2019, but decisions must be made in the near future for this timeframe to be met.

Other than this, no other assistance is required from the Icelandic or UK Government for The SuperConnection to move ahead. The project is ready both financially and technologically.

Funding for the multi-billion pound project will be led by Disruptive Capital Finance, with support from banks, pension funds, export credit agencies and strategic investors. The viability of ASC’s HVDC cable technology has been recognised and is ready to deploy as soon as the project is underway.

The development of the project is following a typical infrastructure capital investment program as set out below:

The development of HVDC technology can be traced back as far as the 1880s. Modern HVDC transmission uses technology developed in Sweden and Germany in the 1930s with the first commercial installations in the Soviet Union and Sweden in the 1950s.

Today, HVDC is only used in point-to-point connections. The technology requires conversion to and from alternating current (“AC”) to HVDC at each end point via a voltage-source converter (VSC) station, as most onshore electricity grids are AC based. The conversion from AC to HVDC, and vice versa, is technically the most complicated part of the entire process.

Fortunately, our VSC stations will be located on land, making them easier to maintain. The type of VSC stations that we will use are well-established and have a smaller footprint and increased weather resistance.

For long distance bulk electrical power transmission, HVDC transmission is a superior technology to AC systems for a number of reasons: • the efficiency of HVDC is only limited by the design of the cable (both conductor and insulator) and the operating temperature; • HVDC transmission can achieve very low transmission losses, using generated electrical energy more efficiently and making it very economical;• for submarine power cables, HVDC avoids the heavy currents required to charge and discharge the cable capacitance each cycle;• HVDC allows asynchronous AC grids or AC grids with different frequencies to be connected, improving the stability and economy of each grid;• the power flow through an HVDC cable is fully controllable in either direction and has inherent overload capability that can be actively used for peak supply. This facilitates effective stabilisation of a network against disturbances due to rapid changes in power; and• HVDC (particularly XLPE) cables are unobtrusive and environmentally friendly.

THE FACTORY

ADVANCED MANUFACTURING CAPABILITY FOR THE NORTH EAST OF ENGLAND

The global market for HVDC cabling faces a major capacity challenge. Atlantic SuperConnection is developing a world class manufacturing HVDC cable factory (The Factory) in the North East of England to overcome this obstacle.

The Factory will be a joint venture with an existing and world leading HVDC subsea cable manufacturer. It will be built in a port in the North East of England. The enormous HVDC cables require direct access to very large ships for transportation and export and Atlantic SuperConnection has been working with the local authorities in the region to deliver the project.

This exciting development would provide:• significant investment in the North East of England;• a new and strategically important high-tech manufacturing capability; • a source of hundreds of jobs and strong economic growth and social benefit for the region; and• import substitution and export opportunities

Atlantic SuperConnection is currently undertaking an assessment of the ports in the North East of England to find the best potential sites for The Factory. Three ports have been shortlisted.

1. REGULATORY AND POLITICAL

The Joint Task Force between the UK and Icelandic governments has done a great job in evaluating the project and reporting back positively. However, while co-operation between the two governments is always desirable, the best approach to delivering The SuperConnection for consumers is via the private sector with appropriate funding support from HMG.

ASC has spent c. £10 million ensuring that The SuperConnection is technical feasibility. ASC has engaged with the world’s largest cable engineering companies and leading advisers on the manufacture and laying of sub-sea HVDC cables. ASC is now very confident that the SuperConnection can be delivered by the mid 2020s.

Yes, The SuperConnection will take five / six years to construct. In order to meet the key date for the UK Government of 2025 (when coal and nuclear legacy plant are due to come off-line), construction needs to begin as soon as possible.

If we start now, we can hit the key start date with much greater certainty than other big energy generation projects.

3. FINANCE

Development and delivery of The SuperConnection is a multi-billion pound project. As with any company, and in order to raise funds in the first place, we need to make a return on our investors equity and debt investment. Our investors (equity and debt) all have a duty to their shareholders to make a return on any investment. If a CfD mechanism is secured, any return will be regulated and limited by the UK Government..

Potential investors include UK and international banks, pension funds, sovereign wealth funds, utility companies, export credit agencies and others. Atlantic SuperConnection would especially welcome Icelandic participation in investing in the project. No capital support from the UK or Icelandic governments is required.

The experienced team behind Atlantic SuperConnection has overseen about £110 billion of infrastructure investments in the last 20 years. Atlantic SuperConnection has been approached by a number of entities interested in investing in this exciting and ground-breaking project. Atlantic SuperConnection is confident that the funds can be raised.

4. COMPETITION

Atlantic SuperConnection is currently the only active developer of a cable from Iceland to the UK. It is the only company that has spent significant funds ensuring The SuperConnection is technically feasible, planning the route of the cable, and establishing which companies can deliver the project.

The UK needs all the low carbon power it can get. This is especially true of flexible on-demand and baseload power which is always available at any time of day. This type of on demand power is used to balance intermittency from renewable energy.

The SuperConnection is considerably more cost-effective than all other forms of dispatchable, flexible, low carbon baseload electricity such as nuclear energy and tidal power.

5. ECONOMIC IMPACT

Support from the UK Government for the project will be lower than for many other technologies. Atlantic SuperConnection’s financial model projects a strike price of £65 MW/h thereby providing consumers with a long-term and cost-efficient solution.

The SuperConnection will create hundreds of jobs during construction which is expected to take five/ six years. The operation and long term management of The SuperConnection will also create highly skilled jobs in the North East of England.

The SuperConnection will not impact fish stocks along any of the route. There will be a narrow corridor where the cable is buried through which bottom trawling will be prohibited in accordance with the international treaties, as with any electricity or telecommunication sub-sea cable. Bottom trawling is not conducted for much of the route of the cable.

Atlantic SuperConnection is planning to invest millions in R&D to optimise both the HVDC cable technology and cable laying efforts. This will continue with The Factory and the test facility for years to come. This will benefit The SuperConnection and ready the UK to deliver future projects around the world.

Atlantic SuperConnection is already working with the University of Southampton on cable routing.

Ideally, few or no new power plants will need to be built in Iceland. Iceland already has most of the power generation assets The SuperConnection will require. This will be a decision for the Icelandic Government.

Existing plant already have surplus capacity, and Iceland is currently wasting energy by spilling water over the dams. Iceland is planning on upgrading older plant to produce more electricity.

No, The SuperConnection need not affect the price of electricity in Iceland. In the same way that large energy users (e.g. aluminium smelters) are separated from the domestic market, The SuperConnection may be ring-fenced from the market, to ensure that domestic power prices are not affected.

The Icelandic grid requires significant upgrades regardless of whether The SuperConnection is built. However, The SuperConnection will help provide the financial resources to the country to make this work viable through the hundreds of millions of dollars that will flow to Iceland through The SuperConnection.

The SuperConnection’s strike price will be lower than many other low carbon energy sources. This will have a positive effect on the levy control framework. Further with a price of £65/ MwH there will be times when The SuperConnection would be paying back under a CfD regime.

By offering an alternative, cost-effective technology at large scale in the near-term, The SuperConnection will encourage competition among the other low carbon electricity developers. We anticipate that this will result in downward pressure on the cost of energy.

While it would be a shorter distance to Scotland, there are limitations on the ability of the UK’s electricity grid to transmit the power from North to South, where the majority of the power would be used.

Therefore, linking to England provides better value for money for UK electricity consumers, is more environmentally friendly, and ensures that less power is lost in transmission from one end of the country to the other.

A project of this scale is a long term endeavour. Atlantic SuperConnection has spent a lot of time and money ensuring The SuperConnection is technically, politically, environmentally and financially viable.

05/02/2018

Category: Latest updates

Fiona Reilly appointed Chair of the Expert Finance Group on Small Reactors

05/01/2017

Category: Latest updates

Iceland's volcanic heat may be the perfect solution to Britain's energy crunch

28/11/2016

Category: Latest updates

City financier urges UK support for £3.5bn Icelandic power cable

28/11/2016

Category: Latest updates

Icelandic volcanoes to keep Britain warm

26/11/2016

Category: Latest updates

French giant signs up to help Icelandic volcanoes power UK homes

29/10/2015

Category: Latest updates

Multi-billion pound plan to power UK homes with Icelandic volcanoes within 10 years

02/01/2016

Category: Latest updates

Britain to share more electricity with France and Ireland under new City scheme

01/02/2016

Category: Latest updates

Costs and benefits of GB interconnection

01/11/2013

Category: Latest updates

Impacts of further electricity interconnection on Great Britain

Category: Latest updates

Overview of IceLink

ASC has secured intiial bids from HVDC cable manufacturers and HVDC converter stations in relation to our Projects.
ASC has downselected three ports as potential sites for The Factory

Andrew Hodgson

Chief Executive Officer

Prior to becoming Chairman of the North East LEP in 2016, Andrew was CEO of manufacturing firm Soil Machine Dynamics (SMD).

Andrew is an expert in sub-sea engineering and is Chair of Subsea North East; a Board Member of Subsea UK; and Trust Board Member for the International Centre for Life. He has been awarded three Queen’s Awards for Industry and has previously been named North East Business Executive of the year; EY Entrepreneur of the Year; and EEF’s UK manufacturing champion.

Ian Drew

Chairman and Non-executive Partner

Ian joined ASC in June 2017. He is Chairman of Tantalum Corporation, one of Europe's leading connected vehicle companies that is helping to create the next generation ecosystem for the connected vehicle of the future.

Ian previously spent twelve years as an Executive Vice President at computing firm ARM, leading on business development, marketing and strategy.

Fiona Reilly

Executive Partner

Fiona is an international energy expert with over 20 years experience of the international energy markets, including development, structuring, EPCs, international legal and regulatory development and compliance, licensing and financing.

She is a Director of the Nuclear Industry Association and is Chair of the UK Government’s Working Group on Small Reactors.
She is recognised as an expert in the development and financing of nuclear projects by the International Atomic Energy Agency (IAEA). She has also worked in the oil and gas industry and other forms of electricity generation, including hydro, solar and coal.

Jennie Younger

Advisory Partner

Jennie is an Advisory Partner at Disruptive Capital Finance, a private equity firm that is leading the financing of ASC.

She is also Executive Director for Development at King’s College London and King's Health Partners (Guy's and St. Thomas' Hospital, The Maudsley and King's College Hospital) and Non-Executive Chairman of The Centre for Process Innovation (CPI). Jennie has more than 30 years of experience in strategic corporate affairs, government relations, investor relations and communications, having held senior leadership roles at GlaxoSmithKline, Deutsche Bank and AstraZeneca. Jennie has also been a Senior Managing Director and Partner at Management Consultancy firm, FTI Consulting.

Edi Truell

Founder

Edmund has over 30 years of financial services experience in private equity and debt markets, including leadership positions in banking, private equity, pensions, insurance and debt investment.

He trained at Bankers Trust Co in New York, following which he was appointed a Director of Hambros Bank in 1991; Chief Executive of Hambro European Ventures in 1994; led the 1998 buyout and formation of Duke Street Capital; and was responsible in 2000 for creating and building Duke Street Capital Debt Management.